[클릭~넥스트 증시] March 1st stock market, there is a possibility of further rise in US Treasury yields… “KOSPI 2950~3150 line forecast”

Stock market experts predicted that in the first week of March, the US Treasury bond rate could rise further in the Korean stock market. As for the KOSPI weekly expected band, we estimated the line of 2950 to 3150 points.

◇Young-Hwan Kim, Researcher at NH Investment & Securities= Next week’s KOSPI weekly forecast range is projected to be around 2950~3150. Upside factors include discussions on additional stimulus measures by the US administration and the initiation of vaccination in Korea, while downside factors include rising US Treasury yields and a valuation burden.

In particular, the biggest unrest factor in the stock market is the rise in US Treasury yields. The rise in interest rates is a burden because it increases the discount rate burden on the stock market. On the one hand, however, it is worth considering that the stock market’s earnings momentum is rising rapidly. The impact of cost variables plays a role in reducing the gap between real and stock prices. When adjusting for cost variables such as interest rates, it is effective to respond to split buying.

From an industry perspective, we need to pay attention to US exports and domestic consumer stocks. The rise in inflation expectations in the US leads to an increase in exports by Korean companies. The growth rate of Korean exports is expected to expand to 30% in 2Q. In the case of US exports, the higher earnings outlook can offset the increase in the discount rate burden, so we expect relatively good performance. It is recommended that domestic sectors buy after vaccination with the improvement of domestic consumption sentiment in mind.

◇Moon Namjoong Researcher at Daishin Securities = The stock market’s uptrend will begin to break out of the range of interest rates. The current 10-year U.S. bond rate has risen close to 1.5%, the level before the outbreak of the novel coronavirus infection (Corona 19) crisis as of the 24th, reflecting expectations for economic recovery in certain areas. As there is greater room for limiting future interest rate hikes, stock market uncertainty will gradually ease.

In the next 1-2 weeks, there is room for the 10-year U.S. bond yield to rise to around 1.5%. 1.5% is the level of interest rates before the outbreak of Corona 19 in February last year. As the background of the current interest rate rise reflects the stage of economic recovery excluding the crisis situation, there is room for further upside. In addition, as interest rates rise in the bond market, the burden of rising interest rates can be increased in response to a fall in real returns in the future (withdrawal of volume). However, the effect is temporary in that it is an initial reaction to the first occurrence.

Interest rates rising on the back of the past economic recovery did not burden the stock market rise. It only triggered a stock market adjustment if an interest rate hike led to a tightening turn signal. The fundamentals are not strong enough to tighten when the crisis occurs less than a year later. From the Fed’s position of full employment and inflation, the current unemployment rate (6.3% as of January) will inevitably give strength to the easing monetary policy stance. It is time to overweight the stock market, which will be on the uptrend, leaving interest rates behind.